WT Business Beat

By Nick Wakeman

The curiously perplexing case of Eagle II

There is a not very well-kept secret out in the market, and I’ve struggled with how to cover it, and that’s the mess that the Homeland Security Department’s Eagle II seems to be becoming.

So far, 96 awards have been made across its three functional areas for IT services and its multiple small business categories. There also have been 28 protests, which have led DHS to pull back some awards. A couple protests have been denied by the Government Accountability Office, and a few others were withdrawn by the protester.

But plenty are still active, including 10 more that have been filed since Nov. 26. The biggest name on that list is Unisys Corp., an incumbent from the first Eagle contract.

Eagle II is perplexing for a couple reasons, and DHS seems to have a cone of silence around the procurement. I had a brief off-the-record conversation with one DHS official who told me to be patient and that everything would work out in time.

That sounds like procurement’s version of “I’m from the government, and I’m here to help.”

But here is what is perplexing to me:

The number of incumbents from Eagle I that are not on Eagle II.

The slowness DHS has exhibited in getting its marquee contract up and running, and the impact that will have.

Let’s take the losses by the incumbents first.

There are 36 companies on Eagle I, with a few holding more than one contract. Of that group, only 14 have won spots on Eagle II. Could 22 companies really have performed so poorly that they lost their spots on the contract? [I made a mistake when I published this. I had included Apptis as one of the incubments who didn't make it on Eagle II. Thanks to the alert reader who pointed out my mistake. And my apologies to Apptis.]

Among the missing are:

Accenture

AT&T

Booz Allen Hamilton

Harris

General Dynamics

Lockheed Martin

Northrop Grumman

Raytheon

SAIC

SRA International

Unisys

Curiously, Unisys is the only one of these large companies to protest so far, but since Unisys only filed its protest on Dec. 3, my expectation is we’ll see more in the coming days.

One source told me that many of these companies are weighing their options beyond just filing protests; they are actively looking for ways to move the DHS work they currently have under Eagle I to other contract vehicles. And who can blame them?

That’s the danger of DHS taking so long to get this contract up and running. We’ve already seen DHS go to a General Services Administration contract for the Customs and Border Protection contract known as the Automated Commercial Environment.

ACE had been a standalone contract which DHS said it couldn’t recompete under Eagle II because it wasn’t ready yet, and because there wasn’t enough time left under Eagle I.

So, if work under Eagle I is expiring, and Eagle II isn’t ready, then DHS will have no choice but to move to other contracts, which creates an opportunity for the losing incumbents to move their current work to newer vehicles.

But this raises the question that if work can be shifted to other vehicles, is there a need for Eagle II with all its delays?

From many of the industry people I’ve been talking to, there is a sense that no one really knows what’s happening, and that the people who do know aren’t telling.

One person told me to look at the example of Alliant when GSA tried to award that contract; it, too, was hit with a flood of protests, and GSA ended up doubling the number of awards it intended to make.

Today, Alliant is running well and few complain about it. Ironically, Alliant is benefiting from the troubles with Eagle II.

So, there is hope for Eagle II. It will probably work itself out, but the big question is how long it will take, and at what cost.

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